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Railroad Maintenance and Industrial Health & Welfare Fund v. Industrial Contracting Services, Inc.

United States District Court, Seventh Circuit

November 7, 2013

RAILROAD MAINTENANCE AND INDUSTRIAL HEALTH AND WELFARE FUND, Plaintiff,
v.
INDUSTRIAL CONTRACTING SERVICES, INC., Defendant.

OPINION

RICHARD MILLS, District Judge.

Pending before the Court are Motions for Summary Judgment filed by the Plaintiff and the Defendant.

I. INTRODUCTION

This is an action pursuant to the Employee Retirement Income Security Act of 1974 (ERISA), as amended, 29 U.S.C. § 1145. Plaintiff Railroad Maintenance and Industrial Health and Welfare Fund is an employee benefit plan administered pursuant to the terms and conditions of the Agreement and Declaration of Trust, which created the Fund. The Plaintiff filed this action against Defendant Industrial Contracting Services, Inc., alleging that Defendant is an employer engaged in an industry within the meaning of ERISA, 29 U.S.C. §§ 1002 (5), (11), (12) and (14).

In its Complaint, the Plaintiff seeks an audit of the Defendant's payroll records and payment for any unpaid contributions allegedly due for the period August 10, 2007 to the present. The only issue facing the Court is whether the Defendant is obligated to contribute to the Plaintiff Fund.

II. FACTUAL BACKGROUND[1]

The Plaintiff Fund is required to be maintained in accordance with the provisions of the Labor Management Relations Act of 1947 and ERISA.

In August 2007, the Defendant contacted both Operating Engineers Local 150 and Laborers Local 773 in an effort to reach an agreement regarding the Defendant becoming signatory to the Rail Transportation and Operation Agreement ("the RTOA"). The RTOA is a nationwide collective bargaining agreement in effect between multiple signatory contractors and two unions-Operating Engineers Local 150 and Laborers Local 773.

In August of 2007, Operating Engineers Local 150 transmitted to the Defendant Company a blank one-page "Letter of Assent" form printed on Operating Engineers Local 150 letterhead. The Plaintiff alleges that on or about August 10, 2007, Joshua M. Gray signed the Letter of Assent on behalf of the Defendant. Thomas M. Gray, the President of the Defendant Company since its inception in 2003, hand wrote, "In addition, ICS's letter dated 9-14-07 will become part of the Terms and Conditions of this Agreement." The Tom Gray letter dated September 14, 2007 included ten bullet points, each of which describes changes the Defendant wanted from the standard RTOA.

On September 18, 2007, Tom Gray received a three-page response letter dated September 17, 2007 from John Price, Secretary Treasurer of Laborers Local 773. The letter from Price concluded as follows: "According to the revision outlined above, kindly make the necessary modification to the previously proposed addendum to the RTOA and submit same to this office at the earliest possible date."

On September 21, 2007, Joseph Crenshaw, Business Manager for Operating Engineers Local 150, faxed to the Defendant Company a two-page document printed on the letterhead of the International Union of Operating Engineers 150 titled "Addendum to the Rail Transportation and Operation Agreement (RTOA), " which consisted of six numbered paragraphs.

The Plaintiff alleges that, at all relevant times, Joshua Gray was the Railroad Division Superintendent for Industrial Contracting Services, Inc. Joshua Gray later sent the Letter of Assent to Union representatives John Price (Laborers' Local 773) and Joseph Crenshaw (Operating Engineers' Local 150) in September 2007. The Letter of Assent states in pertinent part as follows:

The undersigned agrees to be bound by the terms and conditions of the Rail Transportation and Operation Agreement as negotiated between the National Railroad Construction and Maintenance Association and the Laborers' International Union of North America Local 773 and the International Union Operating Engineers Local 150. In addition I.C.S. letter dated 9-14-07 will become part of the terms & conditions of this Agreement.

The Plaintiff alleges the Letter of Assent contained the initials of Joshua Gray, Joseph Crenshaw and John Price next to the crossed off second paragraph. The Letter of Assent was received by the Plaintiff on October 9, 2007.

The Plaintiff alleges that, on September 21, 2007, Tom Gray signed the Addendum to the Rail Transportation and Operation Agreement ("the Addendum to RTOA"). After discussion with Joseph Crenshaw regarding the Addendum, John Price, the Secretary-Treasurer/Field Representative from Laborers Local 773, signed the Addendum to the RTOA effective September 25, 2007. On September 25, 2007, John Price faxed Crenshaw the signed Addendum to the RTOA stating that "it's not pretty but it will do."

The Defendant contends that Joseph Crenshaw called Tom Gray on the telephone and told Gray that Local 150 would not sign the Addendum to the RTOA. Rather, Crenshaw insisted that Defendant must sign the standard RTOA or his union would not participate. The Plaintiff disputes the allegation and questions why Crenshaw would prepare the Addendum to the RTOA, send it to the Defendant for signature and then call the Defendant's President to advise he would not sign the very document he had prepared earlier.[2]

The Plaintiff alleges that on September 28, 2007, Joshua Gray sent a fax to John Price stating, "John, The f[ol]lowing is a list of employees that will have to be signed up with your hall..."

The Addendum to the RTOA was received by the Plaintiff Fund on October 9, 2007. On October 10, 2007 Dora Crenshaw, the Executive Director of the Railroad Maintenance and Industrial Health and Welfare Fund, sent the Defendant a letter welcoming the Company to the Fund, enclosing remittence forms and the delinquency policy.

The RTOA states in pertinent part as follows:

Section 1. Health and Welfare
A. Railroad Maintenance and Industrial Health and Welfare Fund for Laborers and Operating Engineers:
(1) The Employer agrees to make payments to and be bound by the Trust Agreement of the Railroad Maintenance and Industrial Health and Welfare Fund, including any amendments or changes thereto...

The Fund's Trust Agreement states in pertinent part as follows:

The Trustees... may, by their respective representatives, examine the pertinent employment and payroll records of each Employer at the Employer's place of business whenever such examination is deemed necessary or advisable by the Trustees ...


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